FM announces important measure for promoting Affordable Housing

While presenting the General Budget 2016-17 in Lok Sabha today, the Union Finance Minister Arun Jaitley proposed to give 100% deduction for profits to an undertaking from a housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019, and is completed within three years of the approval. Minimum Alternate Tax will however apply to these undertakings.

Distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax.

For the ‘first – home buyers’, he proposed to give deduction for additional interest of Rs. 50,000 per annum for loans up to Rs. 35 lakh sanctioned during the next financial year, provided the value of the house does not exceed Rs. 50 lakh.

He also proposed to exempt service tax on construction of affordable houses up to 60 sq. metres under any scheme of the Central or State Government including PPP Schemes. Alongside, he further proposed to extend excise duty exemption, presently available to Concrete Mix manufactured at site for use in construction work at such site to Ready Mix Concrete.